All was not roses, however. For one thing, the economic health of the USSR remained well below that of most Western countries. Key indicators like life expectancy, calorie consumption, infant mortality, and per capita income remained much lower in the Soviet Union than in Western Europe, North America, or Japan. Though improved, Soviet industry was essentially the same creature it had been at the end of the 1980’s: antiquated, labor-intensive, and inefficient. The success of the private agricultural initiative raised real questions about the fate of the state-run system—questions that were keeping the hard-liners up at night.

Nor had any of the problems facing the Soviet Union in 1990 really gone away. Military spending continued to consume personnel and resources far out of proportion to the militaries of Western nations. Indeed, whereas the best and brightest of the Western nations were going into the capitalist economy or academia, the best and the brightest of the Soviet Union continued to go to the military or the security apparatus. In terms of raw funding, something more than a quarter of the Soviet GNP still was going to the military or directly-related programs. In the West, the figure varied between four and twelve percent. The situation could not remain as it was, but Danilov had made most of the easy cuts.

Housing, though more available than it had been, remained deplorably short and in deplorable condition. The very success of the cottage industries was causing ripples. Having learned that they could manage some of their own affairs, the Soviet citizenry was showing an increasing and dismaying tendency towards self-expression. At the same time, Danilov had started to lift the thumb of oppression on the people. Questioning the Soviet system—and indeed the whole CPSU philosophy—became more permissible and consequently more widespread. The Soviet people, so long repressed, generally were not particularly grateful to Danilov for the changes he had made. Rather, many called for more dramatic changes.

The Soviet Union remained an uneasy conglomerate. Though conventionally called a nation, the Soviet Union was really more the modern Russian Empire. The fourteen other republics had varying mixes of Russian and non-Russian people and various histories of independence. In the western part of the USSR, Belarussia and the Ukraine were the most closely tied to Russia in terms of language and culture. The Baltic States had enjoyed a brief period of independence following the Russian Civil War that they had never forgotten. Though mostly Slavs, the Baltic peoples were distinct from the Russians. The Transcaucasus Republics—Georgia, Azerbaijan, and Armenia—were peopled by distinctly non-Russian groups who had been part of Imperial Russia at the end of the 1800’s. Though the Russian Civil War brought the Transcaucasus independence, the Soviets had re-conquered the region by the 1930’s. The Central Asian Republics—Kazakhstan, Kyrgistan, Tajikistan, Turkmenistan, and Uzbekistan—were the most troublesome. Peopled by Asiatic tribes, the Central Asian components of the Soviet Union were the most inclined towards rebellion and the most obviously resentful of Russian dominance of their lives.

All along the border of the empire were states and people long hostile to Russia and by extension the Soviet Union. In Europe was the old bugbear Germany. Twice since 1900 had Germany fought Russia. Both occasions resulted in calamity for Russia. Since then, the bulk of Soviet defenses had been arrayed towards Europe. With Germany divided into three parts—a neutral Austria, a NATO-bound West Germany, and a Pact-bound East Germany—there appeared to be little immediate threat from Germany. Nevertheless, West Germany had become a major economic power by 1990. The Germans never could be trusted fully, so it was vital to maintain both great military strength in the area and a buffer zone in the form of the Eastern European states.

Along the southern edge of the Soviet Union were various Muslim states that were antipathetic towards the USSR. These nations included Turkey, Iran, and Afghanistan. Though incapable of invading the USSR outright, each of them was perfectly capable of supporting dissident movements of Muslim peoples inside the Soviet Union. In the event of a major distraction for the Soviet Union, Turkey and Iran could become quite dangerous.

In the Far East was the People’s Republic of China. Since the Sino-Soviet break in the 1960’s, the two great Communist powers had been at odds. Each strove to be the leader of the Communist world. Where once the friendship between China and the USSR had been deep, their rivalry was now intense. It was here that the hard-liners within Danilov’s cabal, now led by Defense Minister Ivan Sauronski, sought their opportunity.

Since the death of Mao, China had moved along a road of increasing economic liberalization. While maintaining control over the political arena, the Chinese Communist Party had encouraged the Chinese to use their entrepreneurial talents. The result was a dramatic increase in the Chinese GNP throughout the late 1970’s and 1980’s. In the first half of the 1990’s, China’s economy continued to boom. The situation was an embarrassment to the Soviet Union.

The Chinese situation threatened to change the balance of power in Eurasia and beyond. Possessed of more than a billion people, China had only to achieve half the per capita income of the USSR for the Chinese GNP would dwarf that of the Soviet Union. At that point, the relative power of the Soviet and Chinese militaries would come to a reckoning.

Moreover, China was expansionist. She had no choice. China was critically short of a number of key strategic resources. Compared to the global average, China had less arable land, forest, grassland, fresh water, native coal, and native oil per person. China’s massive and growing population put tremendous pressure on her leadership to take some kind of action to secure new land and new resources.

For decades, the Soviets had known that China cast covetous eyes at the vast tracts of Siberia. Soviet Siberia was under-populated while possessed of tremendous reserves of petroleum, minerals, and timber. The USSR did not have the people to fill and exploit Siberia properly, but China did. The Soviet hard-liners were convinced that the Chinese would have to make a move on Siberia sooner or later.

Adding to the Soviet problem with China was the example the Chinese set for other Communists around the world and even within the Soviet Union. Danilov’s reforms notwithstanding, the Chinese economy offered more promise than the Soviet economy. By the 1980’s, the Chinese vision of Communism was offering real competition to the Soviet vision. Throughout the 1990’s, China continued to challenge the Soviets throughout the Third World and even in Eastern Europe. Something had to be done.

Worse, the Chinese were appealing to the Turkic peoples of Central Asia. Turkic-speaking tribes lived in far western China and throughout Soviet Central Asia. Though Danilov’s actions offered some hope, the Chinese unfortunately continued to offer a brighter future for some of Soviet Central Asians through their Turkic cousins. Separatist movements were showing increasing signs of activity.

Led by Defense Minister Sauronski, a faction within Danilov’s government began to see a possible solution to several of their problems. On the one hand, Danilov was getting out of control. He was reforming the economy, but he was also fostering a dangerous instinct for self-determination among the Soviet people. Danilov continued to seek cuts in the military budget, which would bring the state and the military into conflict with one another sooner or later. He continued to build trade with the West, which would give the West more leverage in its dealings with the Soviet Union. And he was permitting Eastern Europe to loosen its ideological, political, and economic ties to the USSR. Taken together, these acts might bring down the Soviet Union. Unfortunately, things were going rather well for the moment. Support for Danilov throughout the Party was simply too high for the Sauronski crew to overthrow him.

On the other hand, there was China. Everywhere the Soviets looked in the Communist world, the Chinese were there competing with them. Even the Eastern Europeans were beginning to use Chinese ideas for controlling the body politic while allowing a semi-capitalist economy to flourish. Something had to be done about the other great Communist power.
By the end of 1994, the hard-liners at the top of the Soviet government had decided to force a war with China.